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Integration of Simulation‐Based Cost Model and Multi‐Criteria Evaluation Model for Bid Price Decisions
Author(s) -
Wang WeiChih,
Dzeng RenJye,
Lu YuHuang
Publication year - 2007
Publication title -
computer‐aided civil and infrastructure engineering
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.773
H-Index - 82
eISSN - 1467-8667
pISSN - 1093-9687
DOI - 10.1111/j.1467-8667.2007.00480.x
Subject(s) - bidding , computer science , pairwise comparison , operations research , markup language , decision model , fuzzy logic , econometrics , economics , microeconomics , machine learning , artificial intelligence , mathematics , xml , operating system
Several criteria affect bidding decisions. Current bidding models determine a markup based on a fixed project construction cost. This work presents a novel bid price determination procedure that is built by integrating a simulation‐based cost model and a multi‐criteria evaluation model. The cost model is used to consider cost uncertainties and generate a bid price cumulative distribution, whereas the multi‐criteria evaluation model applies pairwise comparisons and fuzzy integrals to reflect bidder preferences regarding decision criteria. The relationship between the two models is based on a practical phenomenon in that a bidder has a high probability of winning when criteria evaluations favor his bid, and, consequently, the bidder would bid a low price, and vice versa. The merits of the proposed procedure are demonstrated by its application to two construction projects in Taiwan .